via NRZ fails to lure investors | The Herald 7 August 2014 by Farirai Machivenyika
The National Railways of Zimbabwe is failing to lure potential investors to revive its operations because of depressed business that has seen volumes of freight falling from 9,6 million tonnes in 2000 to 3,71 million tonnes last year. This was revealed by the Permanent Secretary in the Ministry of Transport and Infrastructural Development, Mr Munesu Munodawafa, on Tuesday when he appeared before the Public Accounts Committee, together with management from NRZ to give evidence on the company’s 2011 audited accounts.
“The (National) Railways has been studied by a number of companies, particularly from the Eastern bloc, but the major challenge that is there and why we have not moved is the aspect of the level of business because obviously any investor would want a return,” he said.
“When we go through the statistics and indicate that for last year we only moved 3,71 million (tonnes) and the break-even point is five million, there will obviously be some element of scepticism on whether they can recoup their investment or how long it would take to recoup their investment.”
Mr Munodawafa said they were negotiating with two unnamed companies to enter into partnerships with the rail transport utility.
“We have two institutions that we are talking to and they are currently going through the due diligence. So I would plead that we allow that process to go through,” he said.
The NRZ is in talks with the Development Bank of South Africa for a US$400 million loan for short-term recapitalisation, while over US$1 billion is needed to completely overhaul its infrastructure. The NRZ is facing a myriad challenges that have resulted in the parastatal accruing arrears of at least US$52 million in statutory obligations, including an equivalent of nine months’ pay to employees.
Despite failure to pay its workers, NRZ management ruled out retrenchments.